On Negotiation
( “or
bargaining” situations )
In the absence of brute force, only commerce can
help to satisfy our needs.
Free commerce then means an ability to negotiate and obtain what you want
by giving something the other party wants. Sometimes this is applicable
to many non-commercial situations also.
(Even inside the family)
Free commerce then means an ability to negotiate and obtain what you want
by giving something the other party wants. Sometimes this is applicable
to many non-commercial situations also.
(Even inside the family)
The
main three points to remember in any negotiation are the
variables of
Time, Information and Power.
variables of
Time, Information and Power.
Time:- If you are in a hurry to satisfy your need and the other party is aware
of it,
then you are in a weak position.
If you are ready to wait, you are stronger .Like you are in a tyre puncture
situation while driving at midnight, in the midst of nowhere and there is only one Shop
open who can do it.
You will pay anything he asks
then you are in a weak position.
If you are ready to wait, you are stronger .Like you are in a tyre puncture
situation while driving at midnight, in the midst of nowhere and there is only one Shop
open who can do it.
You will pay anything he asks
Information:- If you have additional information with you, then you
are stronger.
For example: about regulatory changes which will increase the value of land in
a particular place.
You can buy land there in advance and make a good margin while selling
are stronger.
For example: about regulatory changes which will increase the value of land in
a particular place.
You can buy land there in advance and make a good margin while selling
Power:
- Power is the ability to influence the other party,
as perceived by
the other party.
For example: in a union’s negotiation with management, the power of the union
lies in its ability to mobilize workers and unitedly to organize strikes, sit-ins etc.
The management has to meet its delivery dates, customer commitments etc,
so the union is slightly stronger
the other party.
For example: in a union’s negotiation with management, the power of the union
lies in its ability to mobilize workers and unitedly to organize strikes, sit-ins etc.
The management has to meet its delivery dates, customer commitments etc,
so the union is slightly stronger
Also there is something called BATNA.
That is the Better Alternative To a Negotiated Agreement.
If you already have a better alternative which you can operate if the
negotiation fails,then you are stronger. The ability and readiness to
walk away from the table also has some power.
That is the Better Alternative To a Negotiated Agreement.
If you already have a better alternative which you can operate if the
negotiation fails,then you are stronger. The ability and readiness to
walk away from the table also has some power.
In any negotiation, the first offer made, is not
accepted at all. It is treated as a
bargaining position.
bargaining position.
Remember these points when you are in a negotiation
type of situation.
NOTE: remember
that the best solution is a win-win solution for both sides.
Never go out to destroy the other side brutally. It hurts you in the long run
Never go out to destroy the other side brutally. It hurts you in the long run
